REG - Intnl Workplace Grp - First Quarter Trading Statement

International WorkplaceAnnouncement

Today 07:00

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RNS Number : 8682D  International Workplace Group PLC  12 May 2026

 

12 May 2026

 

FIRST QUARTER TRADING STATEMENT

 

International Workplace Group plc, the world's largest hybrid workspace
platform with a network in over 120 countries through workspace, professional
services and digital brands such as Regus, Spaces, HQ, Signature and Instant
Offices, issues its first quarter trading statement for the three months ended
31 March 2026.

 

4% YEAR-OVER-YEAR REVENUE GROWTH DRIVEN BY NETWORK EXPANSION, 2026 GUIDANCE
MAINTAINED

·      System-wide revenue of $1,166m, growth of 9% year-on-year

·      Group revenue of $958m, growth of 4% year-on-year

·      Network and coverage expanding rapidly, with higher signings and
openings year-on-year

o  Q1 2026 signings 382 (Q1 2025: 224)

o  Q1 2026 openings 222 (Q1 2025: 165)

·      Company-owned year-on-year revenue growth of 2% and RevPAR growth
of 6%

·      Managed & Franchised fee income of $39m, growth of 70%
year-on-year

·      Capital-returns to shareholders progressing in line with strategy
with $75m returned to shareholders so far in 2026

·     Maintaining FY 2026 guidance with adjusted EBITDA range of
$585m-$625m, Company-owned revenue growth of at least 4% (with corresponding
flat costs), and recurring managed fee income of $80m

·      Continued commitment to investment grade credit rating

 

Mark Dixon, Chief Executive of International Workplace Group plc, said:

 

"I am delighted with our strong start to 2026 as we continue the rapid growth
of our network supported by increasing sales despite the challenging economic
backdrop. Potential customers are requiring more flexibility in their Real
Estate strategy to address the uncertainty arising from the impact of
conflicts and the growing influence of AI. This is resulting in record levels
of Enterprise customer enquiries as our coverage and network enable us to
provide unique, flexible, global solutions.

 

Signings and openings continue to grow, allowing the flywheel of our business
model to deliver greater cashflow while requiring less capital to grow than
historically. This combination has enabled a return of over $230m to
shareholders since our Investor Day in New York in December 2023 as we
continue our journey of capital returns."

 

SUMMARY FINANCIALS

 ($m)                           Q1 2026  Q1 2025(1)

                                                     Change
                                unaudited
 System-wide revenue            1,166    1,072       9%
    Managed & Franchised        260      184         41%
    Company-owned               906      888         2%
 Group revenue                  958      924         4%
 Net financial (debt)           (858)    (721)

1.         Q1 2025 was initially reported under IFRS. At H1 2025 the
Company changed the basis of preparation to US GAAP. As a result the Q1 2025
comparatives have been presented under US GAAP and differ from the amounts
previously reported under IFRS

Managed & Franchised: 80% growth in recurring management fees

Total fee revenue increased 70% in the quarter on a year-on-year basis as
system revenue grew by 41% as previously signed rooms evolved into openings,
and already open rooms continued to mature. Recurring management fee revenue
growth continues to grow as expected, delivering $16m in the quarter, growth
of 80% year-on-year. Despite increased macroeconomic uncertainty, signings
accelerated in Q1 to 377, growth of 75% year-on-year, as the model
increasingly becomes the go-to for landlords and partners. Openings continued
to accelerate and we ended the quarter with 336,000 rooms open and a further
231,000 in the pipeline. When all these rooms are open and mature, potential
annual system-revenue of the Managed & Franchised division is over $1.9bn.

                                    Q1 2026  Q1 2025(1)   Growth
                                    unaudited
 System (Partner) revenue ($m)      260      184          41%
 Segment revenue                    52       36           44%
 RevPAR ($) Managed                 164      173          (5)%
 RevPAR ($) Franchised & JV         492      487          1%
 Fee revenue ($m)                   39       23           70%
 Recurring managed fee income ($m)  16       9            80%
 Rooms open                         336,000  227,000(2)   48%
     Managed                        248,000  146,000 (2)  70%
     Franchised & JV                88,000   81,000       9%
 Centres open                       2,082    1,361(2)     53%
     Managed                        1,569    895 (2)      75%
     Franchised & JV                513      466          10%
 Rooms opened in the period         31,000   23,000(2)    35%
 Centres opened in the period       213      153(2)       39%
 Rooms in pipeline                  231,000  192,000      20%
 New centre deals signed            377      218(2)       73%

2.         MLAs included in Managed & Franchised locations / rooms
for Q1 2025 to give like-for-like location and rooms. They were recategorised
as M&F from Company-owned for FY 2025 results as explained at the Investor
Day in December 2025

 

Company-owned: return to revenue growth

Revenue in this segment has grown 2% year-on-year and this also resulted in
RevPAR increasing by 6% year-on-year. We signed 5 new locations in the
quarter. Capex remains as expected and in-line with previous guidance, and we
will continue to add locations on an opportunistic basis.

                               Q1 2026  Q1 2025(1)  Growth
                               unaudited
 Revenue ($m)                  906      888         2%
 RevPAR ($)                    389 (3)  366(3)      6%(3)
 Rooms open                    771,000  749,000(2)  3%
 Centres open                  2,748    2,752(2)    0%
 Rooms opened in the period    3,000    3,000(2)    0%
 Centres opened in the period  9        12(2)       (25)%

2.         MLAs included in Managed & Franchised locations / rooms
for Q1 2025 to give like-for-like location and rooms. They were recategorised
as M&F from Company-owned for FY 2025 results as explained at the Investor
Day in December 2025

3.         Company-owned RevPAR now includes 100% of Virtual-office
revenues associated with Company-owned locations but continues to exclude
revenues from Enterprise Managed Real Estate. Both amounts were previously
reported in D&PS. Underlying RevPAR growth before these changes was also
6%.

RevPAR

RevPAR is a monthly average KPI, defined as the system-wide revenue (excluding
Enterprise Managed Real Estate and excluding rooms opened and closed during
the period), divided by the number of available rooms, which is defined as 7
square metres across all usable space. Given the scale of the growth and room
additions that the Company is adding to the network, RevPAR excluding centres
opened in 2025 is presented below to show RevPAR progression excluding the
impact of centres not yet mature.

RevPAR continues to evolve as expected. It is anticipated that the
higher-growth segments will show a falling year-over-year RevPAR because new
locations that have opened are not yet mature are contained within the
calculation.

Company-owned RevPAR increased by 6% year-on-year, in-line with our pricing
strategy to drive revenue at the segment level. Following the integration of
Digital & Professional Services, all the Virtual Office revenue associated
with a location is included in the RevPAR of that segment - Company-owned
RevPAR increased by 6% before any changes to methodology.

 

 System RevPAR ($, monthly average)  Q1 2026  Q1 2026 ex 2025 Openings  Q1 2025  % change
                                     unaudited
 Managed                             164      222                       173      (5)%
 Franchised and JVs                  492      524                       487      1%
 Company-Owned                       389 (3)  388 (3)                   366 (3)  6%
 IWG Network                         348      378                       355      (2)%

3.         Company-owned RevPAR now includes 100% of Virtual-office
revenues associated with Company-owned locations but continues to exclude
revenues from Enterprise Managed Real Estate. Both amounts were previously
reported in D&PS. Underlying RevPAR growth before these changes was also
6%.

 

 

Financing and Net Debt

 ($m)                                31 March 2026  31 Dec 2025  31 March 2025
                                     unaudited
 Cash & Cash equivalents             (158)          (302)        (135)
 Drawn RCF                           0              0            0
 2027 0.5% Convertible Bond          6              6            178
 2030 €625m 6.5% Corporate Bond      659            658          653
 2032 €300m 5.125% Corporate Bond    333            333          0
 Other                               18             20           25
 Net financial debt                  858            715          721

 

Net financial debt increased over the quarter driven by:

·      Repurchase of 19,484,055 shares for $53m as part of the share
buyback programme

·      Annual cash bonus payments, as accrued for at 31 December 2025

·     The roll out of automated invoice software in the quarter led to
payment days falling markedly over the course of Q1. This will normalise
through 2026 so net debt will reduce accordingly by the end of the year, but
expected to end 2026 at slightly elevated levels compared to 31 December 2025

·     As a reminder, most of the 0.5% coupon Convertible Bond was put
back to the Company in December 2025, and we will have a full year of interest
costs of the €300m 5.125% Corporate Bond during 2026

·     The Company has no exposure to either interest or FX rates on its
bonds - all bonds are fixed coupon with the first refinancing in 2030, and
hedged into USD

 

Outlook and guidance

Whilst the Group's direct exposure from ongoing conflicts is limited,
including from its operations in the Middle East, we are cognisant of the
rising macroeconomic uncertainty and volatility. The broader economic effect
of these conflicts includes global inflationary pressures, and the Company is
taking proactive steps to reduce costs during Q2 and beyond. Despite the
macroeconomic backdrop, centre signings and openings have continued to
accelerate, enterprise customer enquiries are increasing, sales have risen and
pricing has been positive.

Accordingly, our expectations for 2026 currently remain unchanged. We maintain
2026 guidance as communicated at our FY 2025 results on 3 March 2026:

·      Adjusted 2026 EBITDA of $585m-625m

·      Company-owned revenue growth of at least 4%

·      Recurring management fee income of $80m

·      Maintenance of an investment grade credit rating

We have announced $100m of share buybacks so far for 2026, and will update
this with the first-half results on 11 August 2026

 

Financial calendar

19 May 2026                           Annual General
Meeting

29 May 2026                         Final 2025 dividend payment
date

11 August 2026                     2026 Interim Results

3 November 2026               Third Quarter 2026 Trading Update

 

 

Details of results presentation

Mark Dixon, Chief Executive Officer, and Charlie Steel, Chief Financial
Officer, will be hosting a conference call for analysts and investors at 9am
UK time.

Please pre-register through PC, Mac, iOS or Android to attend the conference
call using the link below:
https://brunswickgroup.zoom.us/webinar/register/WN_fdBsp5LsTgy3irqfaTvCsw
(https://links.uk.defend.egress.com/Warning?crId=69e22363fd38d432480ed203&Domain=iwgplc.com&Threat=eNpzrShJLcpLzAEADmkDRA%3D%3D&Lang=en&Base64Url=eNoFwrEKgCAUBdA_8g3R0lhrNAmNoWX2iNTe1aS-Ps45ck7oiKyUgMrr6SWWpL4YL1VA1VkORkicZ2QnNE_LvvVI7Qjt34bl3o1-BtQfFeEcDA%3D%3D&@OriginalLink=brunswickgroup.zoom.us)

 

Further information

International Workplace Group plc

Mark Dixon, Chief Executive Officer

Charlie Steel, Chief Financial Officer

Richard Manning, Head of Investor Relations

 

Brunswick Tel: +44 (0) 20 7404 5959

Nick Cosgrove

Greg Dawson

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